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Migration, population a key to economic growth

8 March 20170 comments

Migration and population growth is a key driver of economic growth and thus prosperity, according to a new study.

Commonwealth Bank economist Jarrod Kerr, the co-author of a report on the impact of migrants on economic growth, said that that advanced countries were undergoing a “seismic shift” in demographic terms as baby boomers begin to retire.

So, Australia’s most valuable import may not be goods a services, but people, the report argues.

In much of Western Europe and Japan, there are not enough people being born to replace those dying, so their economies are unable to replace the people who leave the workforce, causing a fall in both economic growth and inflation, the report said.

Mr Kerr said retired baby boomers will draw down their savings, which means less cash in the banks.

In Australia though, a huge annual intake of immigrants means the economy has a steady supply of young people to fill the gaps left by those retiring, he said.

Australia took in 478,557 migrants with a median age of 26.5 years in 2013/14, according to the most recent figures from the Australian Bureau of Statistics.